Henderson Land Development Company, the Hong Kong property developer chaired by Lee Shau-kee, saw underlying profit for the first half slide 12.1 per cent year on year, as the contribution from Hong Kong property sales tumbled in the first half.

Underlying profit for the six months ended June 30, which excludes fair value change, slid to HK$4.78 billion, down from HK$5.44 billion in the first half of 2015, according to the developer’s filing to the local exchange.

The result was worse than the forecast by Bocom International analyst Alfred Lau, who estimated a 5.3 per cent drop in core profit to HK$5 billion.

The company proposed a 42 HK cents interim dividend, up from 38 HK cents for the same period last year.

“At the beginning of this year, the uncertain outlook in global financial markets and concerns over the

slowdown in the mainland economy posed a drag on Hong Kong’s housing market,” the company said in the filing.

“However, with the growing expectation that any interest rate hike in the US would be mild...the release of pent-up demand coupled with flexible financing schemes offered by developers...has led to a revival in market activities since the second quarter,” it said.

At the beginning of this year, the uncertain outlook in global financial markets and concerns over the slowdown in the mainland economy posed a drag on Hong Kong’s housing market

Henderson Land company statement

Henderson Land saw its interim revenue slide 11.7 per cent to HK$9.73 billion, with net profit falling 12.5 per cent year on year to HK$8.61 billion. Basic earnings per share fell to HK$1.31.

The pre-tax profit from property sales plunged 23.2 per cent to HK$1.19 billion, but pre-tax net rental income increased 4.1 per cent to HK$3.26 billion.

In other businesses, the company saw pre-tax profit from its hotels, including the Four Seasons Hotel Hong Kong, fall 12.5 per cent to HK$98 million amid the ongoing difficulty in Hong Kong’s tourism industry.

Contracted property sales in the mainland China market increased 60 per cent year on year to HK$5.53 billion, including projects in Suzhou, Shanghai, Nanjing.

Shares of the company on Tuesday inched up 0.32 per cent to close at HK$46.35 before the results announcement. Its shares have surged 12.6 per cent since the Brexit vote on June 24, as Hong Kong investors rushed into high-dividend stocks with tangible assets on worries over global economic and geopolitical uncertainties.

Looking ahead, the company said that the ample liquidity in the financial market should hopefully lend support to Hong Kong’s property market, despite growing housing supply.

Five development projects are in the pipeline for a sales launch in the second half. Adding unsold stocks, there will be over 2,000 residential units available for sale, Henderson said.

On the mainland, the two basic policies of “destocking” and “facilitating the sustainable

and healthy development of the property market” will maintain unchanged for the second

half of this year, the developer said, adding that it expects a stable and upward trend in the market for the second half.